Youre the CFO of X Co. X has long-term debt. A covenant in the debt agreement stipulates that X must maintain a current ratio [current assets / current liabilities] that is at least 2.0.

As a balance sheet date approaches, you obtain an interim partial balance sheet that shows the following

Please answer these three questions. Thank you.

You're the CFO of X Co. X has long-term debt. A covenant in the debt agreement stipulates that X must maintain a current ratio (current assets/ current liabilities] that is at least 2.0. As a balance sheet date approaches, you obtain an interim partial balance sheet that shows the following CURRENT ASSETS CASH $ 5,000,000 A/R 2,000,000 INVENTORY 3,000,000 TOTAL C/A $ 10,000,000 CURRENT LIABILITIES A/P $ 4,000,000 OTHER 2,000,000 $ 6,000,000 CURRENT RATIO: 1.67 1 Based on the above, describe what action you could take to raise the current ratio to 2.0. (That action can be described in single sentence] 2. Give the journal entry for that action DR $ CR $ 3 Give the resulting balances in the partial balance sheet CURRENT ASSETS CASH A/R INVENTORY TOTAL C/A $ CURRENT LIABILITIES A/P OTHER $ CURRENT RATIO: #DIV/0